Treasury yields rose Friday after the U.S. September payrolls report showed a surprise decline in unemployment as well as strong growth in wages, making a pivot in Fed policy less likely.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
4.312%
rose 5 basis points to 4.31% -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.886%
rose 5 basis points to 3.89%. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.842%
increased 3 basis points to 3.82%.
What’s driving markets
The U.S. created 263,000 nonfarm jobs in September — roughly in line with expectations — with the unemployment rate falling to 3.5% from 3.7%, while the year-over-year growth rate in hourly wages was 5%.
The unemployment decline was a surprise to economists who had anticipated a steady jobless picture.
Federal Reserve Gov. Christopher Waller late on Thursday said he didn’t expect the jobs report to change anyone’s thinking at the central bank. New York Fed President John Williams will have the opportunity to comment on the data when he speaks at 10 a.m. Eastern.
Ahead of the release, strategists at ING said the price action this week suggests the market has moved away from the early Fed policy pivot idea. “We may well have seen the structural top at 4% for the 10 year, or thereabouts, but we also feel we’re liable to see it at least one more time. There is a large fall in market rates to come, but we’re not at that point just yet,” they added.
